February 9, 2009, 2:08 PM EST

Xstrata Nickel's announcement of 578 permanent layoffs of CAW Local 598 members at its Sudbury, Ontario operations is devastating news for workers, their families and the greater Sudbury area, CAW President Ken Lewenza said.

"Working people across the country and in virtually every sector are being hit by the current economic crisis. Our elected officials must move quickly to stem these devastating job losses. This announcement highlights the need for sector- specific industrial strategies that will put the mining industry and other hard hit industries back on track," Lewenza said.

Xstrata announced the shut down of all its Sudbury operations for three days starting today. The company has indicated they will call back 578 CAW members but permanently layoff 578 others. In total the company has announced it will layoff 686 workers - including production, office and management.

Xstrata purchased Falconbridge in July 2006 for $19 billion. When Xstrata purchased Falconbridge they made a commitment to Investment Canada of no layoffs for three years in return for taking over a major Canadian company, which means July 2009.

"Our members are shocked and have been left reeling by the severity of this announcement by the company," said CAW Local 598 President Dwight Harper. "The federal government must force Xstrata to live up to its commitments under the takeover agreement."

The loss of nearly 600 jobs will mean a drain of almost $50 million in direct income to the local Sudbury economy. Each mining job creates another four spin-off jobs which could also be in jeopardy as a result of the layoffs.